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SCHEDULES

SCHEDULE 10U.K.Recognised supervisory bodies

Part 3 U.K.Arrangements in which recognised supervisory bodies are required to participate

Arrangements for setting standards relating to professional integrity and independenceU.K.

21U.K.The arrangements referred to in paragraph 9(2) are appropriate arrangements—

(a)for the determining of standards for the purposes of the rules and practices mentioned in paragraph 9(1), and

(b)for ensuring that the determination of those standards is done independently of the body.

Arrangements for setting technical standardsU.K.

22U.K.The arrangements referred to in [F1paragraphs 10(2) and 10A(2)] are appropriate arrangements—

(a)for the determining of standards for the purposes of the rules and practices mentioned in [F2paragraphs 10(1) and 10A(1) respectively] , and

(b)for ensuring that the determination of those standards is done independently of the body.

Textual Amendments

[F3Arrangements for setting standards relating to public interest entity reporting requirementsU.K.

Textual Amendments

22AU.K.The arrangements referred to in paragraph 10B(3) are appropriate arrangements—

(a)for the determining of standards for the purposes of the rules and practices mentioned in paragraph 10B(1), and

(b)for ensuring that the determination of those standards is done independently of the body.

Arrangements for setting standards relating to public interest entity independence requirementsU.K.

22BU.K.The arrangements referred to in paragraph 10C(2) are appropriate arrangements—

(a)for the determining of standards for the purposes of the rules and practices mentioned in paragraph 10C(1), and

(b)for ensuring that the determination of those standards is done independently of the body.]

Arrangements for independent monitoring of audits of listed companies and other major bodiesU.K.

23[F4(1)The arrangements referred to in paragraph 13(1)(b)(i) are appropriate arrangements—U.K.

(a)for enabling the performance by members of the supervisory body of statutory audit functions in respect of major audits to be monitored by means of inspections carried out under the arrangements;

(b)for enabling the body performing the inspections to determine sanctions (including those mentioned in paragraph 12(3)(a)) against members of the supervisory body where, pursuant to an inspection, it concludes that the members have not complied with the supervisory body's rules in so far as they are relevant to the performance of statutory audit functions; and

(c)for ensuring that the carrying out of such inspections and the determination of such sanctions are done independently of the supervisory body.]

[F5(1A)Subject to sub-paragraph (1C), the arrangements referred to in sub-paragraph (1) must include provision for an inspection conducted in relation to each person eligible for appointment as a statutory auditor at least once every three years.

(1B)Sub-paragraphs (4) to (9) of paragraph 13 apply in relation to inspections under sub-paragraph (1A) as they apply in relation to inspections under that paragraph.

(1C)The arrangements referred to in sub-paragraph (1) may provide that the body performing the inspections may decide that all or part of the inspection referred to in sub-paragraph (1A) is not required in the case of a member of a supervisory body who performs statutory audit functions in respect of ten or fewer major audits per year.

(1D)If—

(a)the arrangements make the provision referred to in sub-paragraph (1C), and

(b)the body performing the inspections decides that all of an inspection is not required in relation to a member,

the supervisory body must ensure that the arrangements referred to in paragraph 13(1)(a) apply in relation to that member, subject to the modification specified in sub-paragraph (1F).

(1E)If—

(a)the arrangements make the provision referred to in sub-paragraph (1C), and

(b)the body performing the inspections decides that part of an inspection is not required in relation to a member,

the supervisory body must ensure that the arrangements referred to in paragraph 13(1)(a) apply in relation to that part of the inspection of that member, subject to the modification specified in sub-paragraph (1F).

(1F)For the purposes of sub-paragraphs (1D) and (1E), paragraph 13(3) applies with the substitution of three years for “six years”.]

(2)In this paragraph “major audit” and “statutory audit function” have the same meaning as in paragraph 13.

Textual Amendments

[F6Arrangements for independent monitoring of third country auditsU.K.

Textual Amendments

23A(1)The arrangements referred to in paragraph 13(1)(ba) are appropriate arrangements—U.K.

(a)for enabling the performance by members of the body of third country audit functions to be monitored by means of inspections carried out under the arrangements, and

(b)for ensuring that the carrying out of such monitoring and inspections is done independently of the body.

(2)Those arrangements must provide that the body performing the inspections—

(a)may decide that an inspection referred to in sub-paragraph (1) is not required, or that part of an inspection is not required, in relation to a member, and

(b)may direct that the arrangements referred to in sub-paragraph (3) apply in relation to the member or apply to such extent as may be specified in the direction.

(3)The supervisory body must have adequate arrangements for enabling the performance by its members of third country audit functions to be monitored by means of inspections for cases where a direction is given under sub-paragraph (2)(b).

(4)In this paragraph “third country audit function” means any function related to the audit of a UK-traded non-EEA company.]

Arrangements for independent investigation for disciplinary purposes of public interest casesU.K.

24[F7(1)The arrangements referred to in paragraph 16(1) are appropriate arrangements—U.K.

(a)for the carrying out of investigations into public interest cases arising in connection with the performance of statutory audit functions or third country audit functions by members of the body,

(b)where it appears to be desirable following the conclusion of such investigations—

(i)for the holding, subject to sub-paragraph (1A), of disciplinary hearings relating to members of the body,

(ii)unless the interests of justice otherwise require, for any such hearings to be held in public, and

(iii)for decisions to be made as to whether (and, if so, what) disciplinary action should be taken against the members of the body, and

(c)for ensuring that the carrying out of those investigations, the holding of those hearings and the making of those decisions are done independently of the body.

(1A)The arrangements may provide that decisions to take disciplinary action, and decisions as to what that action should be, may be made in respect of a member of the body without the holding of a disciplinary hearing relating to that member where the member agrees in writing that such a hearing need not be held.]

(2)In this paragraph—

Textual Amendments

F8Sch. 10 para. 24(2): definition of "third country audit function" inserted (1.10.2011 with application in accordance with reg. 1(6)) by The Statutory Auditors and Third Country Auditors (Amendment) Regulations 2011 (S.I. 2011/1856), reg. 5(5)(b)

Supplementary: arrangements to operate independently of bodyU.K.

25(1)This paragraph applies for the purposes of—U.K.

(a)paragraph 21(b),

(b)paragraph 22(b),

(c)[F9paragraph 23(1)(c)], F10. . .

[F11(ca)paragraph 23A(1)(b), or]

(d)[F12paragraph 24(1)(c)].

(2)Arrangements are not to be regarded as appropriate for the purpose of ensuring that a thing is done independently of the body unless they are designed to ensure that the body—

(a)will have no involvement in the appointment or selection of any of the persons who are to be responsible for doing that thing, and

(b)will not otherwise be involved in the doing of that thing.

(3)Sub-paragraph (2) imposes a minimum requirement and does not preclude the possibility that additional criteria may need to be satisfied in order for the arrangements to be regarded as appropriate for the purpose in question.

Textual Amendments

F10Word in Sch. 10 para. 25(1)(c) omitted (1.10.2011 with application in accordance with reg. 1(6)) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) Regulations 2011 (S.I. 2011/1856), reg. 5(6)(a)

Supplementary: funding of arrangementsU.K.

26U.K.The body must pay any of the costs of maintaining any arrangements within paragraph 21, 22, 23 [F13, 23A] or 24 which the arrangements provide are to be paid by it.

Textual Amendments

Supplementary: scope of arrangementU.K.

27U.K.Arrangements may qualify as arrangements within any of paragraphs 21, 22, 23 [F14, 23A] and 24 even though the matters for which they provide are more extensive in any respect than those mentioned in the applicable paragraph.

Textual Amendments